Technology | Media | Telecommunications

Wednesday, April 12, 2017

Worldwide IT Revenue will Reach $3.5 Trillion in 2017

Business technology trends across the hardware, software, services and telecom markets have evolved as more enterprise procurement is driven by senior executives that are leading their organization's digital transformation agenda.

Worldwide IT spending is projected to total $3.5 trillion in 2017 -- that's a 1.4 percent increase from 2016, according to the latest market study by Gartner. That said, this growth rate is down from the previous quarter's forecast of 2.7 percent, due in part to the rising value of the U.S. dollar.

"The strong U.S. dollar has cut $67 billion out of our 2017 IT spending forecast," said John-David Lovelock, research vice president at Gartner. "We expect these currency headwinds to be a drag on earnings of U.S.-based multinational IT vendors through 2017."

Worldwide IT Market Development

According to the Gartner assessment, global IT and business executives have been seeking information and guidance on market opportunities and challenges, with the intent to base their critical investment decisions on proven methodologies.

Case in point: the data center system market segment is expected to grow 0.3 percent in 2017. While this is up from negative growth in 2016, the segment is experiencing a slowdown in the server market.

"We are seeing a shift in who is buying servers and who they are buying them from," said Mr. Lovelock. "Enterprises are moving away from buying servers from the traditional vendors and instead renting server power in the cloud. This has created a reduction in spending on servers which is impacting the overall data center system segment."


Driven by strength in mobile phone sales and smaller improvements in sales of printers, PCs and media tablets, worldwide spending on devices is projected to grow by 1.7 percent in 2017, to reach $645 billion.

This is up from negative 2.6 percent growth in 2016. Mobile phone growth in 2017 will be driven by increased average selling prices (ASPs) for phones in emerging Asia-Pacific and China, together with iPhone replacements and the 10th anniversary of the iPhone.

The media tablet market continues to decline significantly, as replacement cycles remain extended and both sales and ownership of desktop PCs and laptops are negative throughout the forecast period. Throughout 2017, business Windows 10 upgrades should provide underlying growth, although increased component costs will see PC prices increase.

Outlook for IT Services Spending

The 2017 worldwide IT services market is forecast to grow 2.3 percent in 2017, which is down from the 3.6 percent growth in 2016. Gartner reports that the modest changes to the IT services forecast this quarter can be characterized as adjustments to particular geographies as a result of potential changes of direction anticipated regarding U.S. policy -- both foreign and domestic.

The business-friendly policies of the new U.S. federal government administration are expected to have a slightly positive impact on the American implementation services market, as the government agencies are expected to significantly increase their IT infrastructure spending during the next few years.